Withdrawal of application admitted under section 7, 9 or 10 [ Section 12A ] - Insolvency Resolution And Liquidation For Corporate Persons - IBC

Withdrawal of application admitted under section 7, 9 or 10 [ Section 12A ] T h e Adjudicating Authority may allow the withdrawal of application admitted under s e c ti o n 7 (Initiation of CIRP by Financial Creditor); or s e c ti o n 9 (Initiation of CIRP by Operational Creditor); or s e c ti o n 10 (Initiation of CIRP by Corporate Debtor), o n a n a p plic a ti o n made by the applicant with the approval of 90% voting share of the committee of creditors , in such manner as may be specified. Insolvency and Bankruptcy Board of India (Insolvency Resolution Process For Corporate Persons) Regulations, 2016- Withdrawal of application ( Regulation 30A ) Application for withdrawal [ Regulation 30A(1) ] An application for withdrawal under section 12A may be made to the Adjudicating Authority - (a) Before the constitution of the committee , by the applicant through the interim resolution professional. [ Regulation 30A(1)(a) ] the interim resolution professional shall submit the application to the Adjudicating Authority on behalf of the applicant, within three days of its receipt. [ Regulation 30A(3) ] The Adjudicating Authority may, by order, approve the application submitted submitted under sub-regulation (3) or (5). [ Regulation 30A(6) ] (b) After the constitution of the committee , by the applicant through the interim resolution professional or the resolution professional, as the case may be: Provided that where the application is made under clause (b) after the issue of invitation for expression of interest under regulation 36A , the applicant shall state the reasons justifying withdrawal after issue of such invitation. [ Regulation 30A(1)(b) ] The committee shall consider the application, within seven days of its receipt. [ Regulation 30A(4) ] Such Application is approved by the committee with 90% voting share , the resolution professional shall submit such application along with the approval of the committee, to the Adjudicating Authority on behalf of the applicant, within three days of such approval. [ Regulation 30A(5) ] The Adjudicating Authority may, by order, approve the application submitted submitted under sub-regulation (3) or (5). [ Regulation 30A(6) ] Estimate Expenses [ Regulation 30A(2) ] The application under regulation 30A(1) shall be made in Form FA of the Schedule-I accompanied by a bank guarantee- (a) towards estimated expenses incurred on or by the interim resolution professional for purposes of regulation 33 , till the date of filing of the application under clause (a) of sub-regulation (1); or (b) towards estimated expenses incurred for purposes of clauses (aa), (ab), (c) and (d) of regulation 31 , till the date of filing of the application under clause (b) of sub-regulation (1). Deposit the Actual expenses incurred for the purpose of regulation 30A(2) [ Regulation 30A(7) ] Where the application is approved under regulation 30A(6), the applicant shall deposit an amount, towards the actual expenses incurred for the purposes of regulation 30A(2) (a) or (b) till the date of approval by the Adjudicating Authority, as determined by the interim resolution professional or resolution professional, as the case may be, within three days of such approval, in the bank account of the corporate debtor, failing which the bank guarantee received under sub-regulation (2) shall be invoked, without prejudice to any other action permissible against the applicant under the Code. Judicial Interpretation of section 12A by Supreme Court Shipra Hotels Ltd. Vs. Value Lines Interiors Pvt. Ltd. SC, dated 03.08.2018 Section 12A, of the Code enacted with effect from 06.06.2018 will not come into the picture since the admission of the petition was on 01.06.2018. Swiss Ribbons Pvt. Ltd. Anr. Vs. Union of India Ors . SC, dated 25.01.2019 At any stage where the CoC is not yet constituted, a party can approach the NCLT directly, which Tribunal may, in exercise of its inherent powers under Rule 11 of the NCLT Rules, allow or disallow an application for withdrawal or settlement. This will be decided after hearing all the concerned parties and considering all relevant factors on the facts of each case. Brilliant Alloys Pvt. Ltd. Vs. S. Rajagopal Ors. SC dated 14.12.2018 Regulation 30A of the CIRP Regulations must be read along with section 12A of the Code. Accordingly, the stipulation in regulation 30A can only be construed as directory depending on the facts of each case. Maharashtra Seamless Ltd. Vs. Padmanabhan Venkatesh Ors. SC, dated 22.01.2020 The exit route prescribed in section 12A is not applicable to a Resolution Applicant. The procedure envisaged in the said provision only applies to applicants invoking sections 7, 9 and 10 of the Code Himadri Foods Ltd. Vs. Credit Suisse Funds AG NCLAT order dt. 07.01.2021 Once the terms of settlement providing a repayment schedule was incorporated in the order, thereby making it an order/ decree of the Court, the grant of liberty to the FC to come back in case of breach of settlement terms could only be interpreted to mean that the revival of CIRP would be sought for non-compliance with the terms of settlement. Francis John Kattukaran Vs. The Federal Bank Ltd. Anr. NCLAT order dt. 13.11.2018 Regulation 30A of the CIRP Regulations cannot override the substantive provisions of section 12A of the Code, according to which the applicant can only move application for withdrawal before the AA and not by the RP. Shweta Vishwanath Shirke Ors. Vs. The Committee of Creditors Anr. NCLAT order dt. 28.08.2019 The application under section 12A having been approved by the CoC with more than 90% of the voting share, it was not open to the AA to reject the same and that too on a ground of ineligibility under section 29A, which is not applicable.